Foundational Economy


The Foundational Economy is relevant to both policy-makers and place-makers. Cynnal Cymru works with both to explore and explain why this part of the economy matters to sustainability.

Foundational Economy

The Foundational Economy covers those areas of the economy that provide the goods and services essential for everyday life.

Health and social care, food, housing, energy and utilities, construction, retailers on the high street and tourism are all areas [or ‘zones’] of the foundational economy.

These goods and services are generally provided by public bodies; (directly or through funding outsourced activities); small and medium enterprise (SME) firms; and much larger companies such as privatised utilities or branches of mobile companies such as the major supermarkets.

The presence – or absence – of a thriving local foundational economy can have a profound impact on places and the communities that they support in terms of goods, services, distribution of income and skills and job opportunities.

Why does the Foundational Economy matter?

  • FE is the part of the economy providing for essential human needs, regardless of geography, income or status
  • Estimates suggest that the foundational economy provides four in every ten jobs in Wales and receives £1 in every three that we spend
  • The businesses and institutions within the FE have a major role to play in helping tackle the nature and climate emergencies, through the ways that they help influence supply chains and customers, as well as through their own operations
  • In some parts of Wales the ‘foundational economy’ is the economy.

A Foundational Economy built on principles of Fair Work and functioning within climate and environmental limits is key to achieving a Prosperous, Resilient, Healthier and More Equal Wales.

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